The FPB believes there should be an updated, uniform system to increase banking confidence. The present cheque clearing system is totally outdated, years behind the rest of Europe, deeply onerous and profoundly damaging to smaller firms. Good financial management is highly important to the smaller business. The fact that British businesses have to wait up to five days for a cheque to clear puts them at a competitive disadvantage to businesses in other European countries.

British banks are bottom of the European league when it comes to processing consumer payments. In Belgium, Denmark, Greece, Spain, Finland and the Netherlands, electronic payments are cleared on the same day. In Sweden, the clearance process can take just a couple of hours, with payments made in the morning appearing in customers' bank accounts that afternoon.

The FPB is concerned that the present system in the UK creates confusion and suspicion. There are differences in the ways that consumer and business transactions are processed, while the physical system is antiquated. Furthermore, when payments are made, the money goes out of one account, but does not immediately appear in the supplier's account, posing the question as to where the money goes to. The FPB believes that, with the technology available today, having to wait days for payments to process is simply unacceptable.

Member comments

"Cheques paid into the bank on which it is drawn should be cleared on the same day if paid into the same branch, and on the following day if paid into a different branch of the same bank."

"In the 21st century, and in view of the available technology, I find it totally unacceptable that payments via electronic means still take the same time as cheques. No one seems to be addressing this matter."

"The cheque clearing system in the UK goes back to the dark ages. Surely a cheque can take 24 hours to clear."

 

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